TMI Blog2016 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the impugned reopening on this TDS issue amounts to change of opinion not sustainable as per hon’ble apex court decision in Kalvenator’s case (2010 (1) TMI 11 - SUPREME COURT OF INDIA ). Coupled with this, the Revenue is unable to make out a case in support of invoking TDS provision u/s. 194C of the Act (supra). We affirm CIT(A)’s order on validity of impugned reopening as well as merits. - Decided against revenue - ITA No. 2040/Ahd/2012 - - - Dated:- 6-5-2016 - Shri Anil Chaturvedi, Accountant Member And Shri S. S. Godara, Judicial Member For the Revenue : Mrs. Somugyan Pal, Sr. D.R. For the Assessee : Shri Pritesh L. Shah, A.R. ORDER Per : S. S. Godara, Judicial Member This Revenue s appeal for A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and during the period between 1/4/2005 and 31/3/06. it was noticed that the assessee has not shown any closing stock or work-in-progress in their accounts (P L as well as balance sheet) though the assessee had ongoing works. However, in the asset side of the balance sheet, an amount of ₹ 36,88,466/- has been shown as receivable(sundry debtor) from the Executive Engineer, Capital Project, Gnndhinagar. Since the assessee was following 'mercantile' system of accounting, an amount of ₹ 36,88,466/- was also required to be included in the total receipts as the same was accrued. It was also noticed that us per Section 40(a)(ia) of the Act, 1961 any payments i.e. interest, commission, professional service, fees, or amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned amount of ₹ 86,34,086/- for job work payment to subcontractors without deducting TDS. The Assessing Officer invoked the impugned disallowance thereupon u/s. 40(a)(ia) by concluding that these payments ought to have been subjected to TDS deduction u/s. 194C(2) of the Act. 6. The assessee preferred appeal. His first ground challenged validity of reopening by terming it as mere change of opinion. He contended on merits that none of the payments made to subcontractors exceeded specified limit of ₹ 50,000/- in any of the payees case. The CIT(A) accepts both these contentions as under:- 7. Now, coming to the first ground of appeal which is against validity of passing reassessment order u/s 147 rw 143(3). The appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces must exist and can't be deemed to exist and belief should be honest and not based on suspicion, gossip or conjecture; East West Commercial Co Ltd 128 ITR 326 (Cal). In the light of these facts and circumstances, the reopening cannot be held valid on the basis of reason recorded of this part of income having escaped assessment. The second count is regarding the AO's belief that the expenses related to jobwork payments amounting to ₹ 86,34,086/- have not been subjected to TDS and therefore, the expense were required to be disallowed as per section 40a(ia) (sic). The original assessment was framed under section 143(3). The AO has called for the details of the very expenses (questioned while reopening] the case at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant in the regular assessment proceedings. In light of the above, it is clear that the expenses have been considered in the original assessment also and the reopening is mere change of opinion and is not legal [Kelvinator India Ltd (SC) 321 ITR 561] Therefore, the reopening is held invalid on the facts and circumstances as discussed above. The reopening is held bad in law. The re-assessment proceedings are therefore directed to be annulled. 8. Ground no. 3 is on the merits of the disallowance u/s 40a(ia). The disallowance depends on whether the payments are actually to the persons as claimed by the assessee or not. Even if for argument sake, if the expenses are not held verifiable; for disallowance u/s 40(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of both of its substantive grounds are devoid of merits. We reiterate our findings hereinabove that the Assessing Officer had called for specific details, assessee filed the same followed by assessment order noting that the assessing authority had perused all the material in record. We are of the opinion that the impugned reopening on this TDS issue amounts to change of opinion not sustainable as per hon ble apex court decision in Kalvenator s case 320 ITR 561 (SC). Coupled with this, the Revenue is unable to make out a case in support of invoking TDS provision u/s. 194C of the Act (supra). We affirm CIT(A) s order on validity of impugned reopening as well as merits. The Revenue s two substantive grounds raised in the appeals fails. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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